Having ramped up diplomacy to mend strained ties, Turkey is opening the door to cooperation in foreign trade with several regional players, relying on its new economic strategy that could mark a new era and yield positive outcomes in bilateral relations.
Accelerated talks between Turkey and the United Arab Emirates (UAE), Egypt, Israel, Saudi Arabia and Armenia could yield new economic agreements during high-level contacts expected in February and the ensuing months.
Similar to those in recent months with the UAE, President Recep Tayyip Erdoğan has stressed Turkey would take steps to improve ties with Saudi Arabia, Egypt and Israel.
Israel’s President Isaac Herzog is set to visit Turkey before mid-February and meet Erdoğan during a trip that is expected to open a new page in strained bilateral relations.
The visit will be followed by the Turkish president’s trip to the UAE on Feb. 14, which would also represent a new period in ties as Ankara seeks to thaw relations with several Gulf states.
Ankara and Abu Dhabi signed accords for billions of dollars of investments in November and Erdoğan said they would herald a "new era" in ties.
The president has been stressing the good momentum in relations with the Gulf countries recently, drawing attention to the fact that the new dynamics emerging in the region played an important role in this.
Erdoğan is also expected to pay a visit to Saudi Arabia this month. The visit is particularly expected to address the unofficial boycott imposed on Turkish imports in 2020.
As for Armenia, the first flight between the two countries was due to take place on Wednesday after Ankara and Yerevan made mutual calls to improve relations.
While diplomatic relations with Egypt have been mutually maintained at the charge d’affaires level since 2013, official contacts were held last year.
Egyptian businesspeople visited Turkey at the end of last month in efforts to strengthen commercial relations and mutual expectations and possible steps were discussed during the meeting.
Record trade with Egypt
Recent developments with these countries have also had a positive effect on bilateral trade, according to official data.
Turkey’s diplomatic contacts with Egypt came to a standstill after the 2013 military coup in the country.
The developments had an impact on trade, and a fluctuating course was observed over the years.
The trade volume between Turkey and Egypt totaled $4.8 billion in 2013, before it reached its highest level at $6.1 billion last year. Exports amounted to $4 billion, while imports totaled $2.1 billion.
Trade with UAE, Saudi Arabia
Relations with the UAE and Saudi Arabia were strained after the failed coup attempt in Turkey on July 15, 2016. The murder of journalist Jamal Khashoggi in 2018 heightened tensions with Riyadh and spilled into bilateral trade.
The trade volume between Turkey and the UAE reached its highest level in 2017 at $14.7 billion. Last year, mutual official visits were made between the two countries after an extended period.
Turkey exported $5.2 billion worth of goods to the UAE last year and bought $2.4 billion of products from the country.
The exchange with Saudi Arabia stood at around $5.6 billion in 2015 before the diplomatic problems. The boycott of Turkish products in the last quarter of 2020 significantly lowered exports to the country.
Turkey sent approximately $2.4 billion worth of products to Saudi Arabia in 2020, before the figure dropped to as low as $215.1 million last year. The bilateral trade volume in 2021 amounted to $3.5 billion.
Exchange with Israel
Tensions in Turkey’s relations with Israel, which rose with the Israeli attack on the Mavi Marmara ship in 2010, were also affected by the Israeli-Palestinian conflict.
From 2010 to 2021, the trade volume between the two countries continued to increase in general, rising from $3.4 billion in 2010 to $8.1 billion in 2021, breaking a record.
Last year, approximately $6.1 billion worth of products were sold to Israel, while $1.9 billion worth of products were purchased from the country.
In the final months of 2021, high-level contacts were held between Turkey and Israel.
Trade with Armenia limited
The doors of a new era are also opening in relations between Turkey and Armenia.
With the occupation of Azerbaijan’s lands in the Karabakh region after the country’s independence, direct trade between Turkey and Armenia halted, the border between the two countries was closed, and land, rail and air links were cut off.
The trade volume between the two countries remained around the level of $15.3 million in the 2012-2021 period.
While exports to the country were at a very limited level, approximately $15 million worth of products were purchased from Armenia in the period.
Middle East specialist Haydar Oruç told Anadolu Agency (AA) on Wednesday that the recent progress in diplomacy with Egypt, Israel, the UAE and Saudi Arabia will also reflect on bilateral economic relations in the future.
Noting that the export figures will increase in the case of normalization, Oruç said that thanks to the energy agreements to be concluded with Egypt and Israel, a diverse array of energy sources will be provided and the sale of energy resources from these countries to third countries will be profitable.
Alternative for LNG imports
Oruç said Egypt is a promising market for Turkey with its population of over 100 million.
Pointing out that the natural gas Egypt extracts from the Eastern Mediterranean can also be a new source of supply for Turkey, he said Egypt will be an important alternative for liquified natural gas (LNG) imports due to its geographical proximity.
When Egypt’s recent defense industry purchases are also taken into account, it is clear that Turkey will be a good market in this area, where it is on the rise, he added.
Oruç pointed out that Turkey’s commercial relations with Israel are progressing independently of politics, saying that if an agreement is reached, a significant volume can be achieved in tourism, health, agriculture, natural mines and other intermediate products.
Saying that commercial relations were not affected much by tensions with the UAE, he said the country is also closely interested in the defense industry and some retail and technology companies in Turkey.
The normalization process with Egypt, Israel, the UAE and Saudi Arabia will have economic benefits as well as political ones, he underlined.
"There is no doubt that Turkey’s existing customer portfolios in these countries will increase beyond their previous level after the removal of political obstacles," he said.
Borders opening
Professor Kutay Karaca of Istanbul Aydın University also evaluated the impact of the dialogue with Armenia.
Pointing out that Armenia’s economy is dependent on Russia, Karaca said: "If Armenia wants to get rid of these economic conditions and increase its welfare level, there are two countries that it has to turn to. These are Turkey and Azerbaijan, which make up 85% of its land borders."
Noting that there are many Turkish goods being sold in Armenia, Karaca said that although the country wanted to boycott Turkish goods during the war, these goods entered via Iran and Georgia.
Opening the borders will also enable Armenia to have an impact on the trade and energy resource routes from Central Asia and to gain profit, he said.
"Maybe it will reduce its dependence on Russia. Armenia is not a country that can directly affect the Turkish economy, but at least it will have an impact on our border cities."